Case 1 a) The profit if 200 plain cheese pizzas produced and 200 plain cheese pizzas demanded is $700 ( ) [ ( )]

The profit if 200 plain cheese pizzas produced and 300 plain cheese pizzas demanded is $700 ( b) Plain Cheese Pizza Produced 200 300 400 500 600 700 800 900 Expected Earning ($) 400 760 985 1,075 985 715 355 (50) ) [ ( )]

Pepperoni & Cheese Pizza Produced 300 400 500 600 700 800

Expected Earning ($) 700 1,010 1,140 1,045 725 270

c) Tom should provide 500 plain cheese pizzas and 500 pepperoni & cheese pizza as the expected earnings for both pizzas are the highest at that number produced.

Case 2 Z-score ( 11.5 & 12.5) = &

= -0.5 & 0.5 Probability of ( 11.5 Micron X 12.5 Micron) = P( -0.5 < z < 0.5) = 0.6915 0.3085 = 0.383 This means that only 38.3% of the capacitor produced fall under the required specifications Useful capacity 800 Number of orders Number of orders At 98% chance = number of orders x P(11.5< X < 12.5) = number of orders x 0.383 = = 2088.77 2089 = 2089 x .98 = 2047.22 2048

American Oil Company should order 2048 numbers of capacitors from the supplier to ensure that they receive 800 working capacitors.

Case 3 Jane Lund should consider implementing a random sampling of the entire population of trucks operating in Idaho. The central limit theory states that if a sample size of sample size n 30 is drawn from a population, the better the approximation to normal distribution. It should be noted that the higher the sample size, the more accurate the approximation would be. However, since she has to work with limited resources, she should use the minimum amount of 30 for each of the weighing station. The amount of defective trucks, x, should be considered from each of the 8 weighing stations (e.g. 4 out of 30 in weighing station a, 3 out of 30 in weighing station b. The sample proportion is obtained from the above data. The mean of the sample, , could be be obtained from the previous value by calculating (

).
( )

Since n30, the sample standard deviation, s, could be used for the calculation

As the sample size is relatively large, a 95% confidence level should be sufficient in estimating the interval which the population mean of defective trucks falls in. The corresponding to 95% is 1.96. With the values of n, x, s, and , the margin of error, E, could be calculated using

The final step is to calculate both left and right endpoints . The population mean (average number of defective trucks), would be between both endpoints. By using this method, Jane Lund can estimate the range in which the population mean with a 95% degree of confidence. After the program is implemented, Jane Lund can repeat the prescribed steps keeping sample size, sampling methods and weigh station used constant. This would allow her to see the effectiveness of the program by comparing both the previously calculated amount and the new amount.